The Impressionable Youth: A Perspective on Japan’s Payment OutlookDavid Laskin |
As in any developed market, there are very distinct generational gaps in Japanese society; each cohort is characterized differently and has adopted behaviors specific to its peer group.
One of the most obvious behavioral differences revolves around payment and how the individual transacts in the local and global economy. The Japanese youth are different from their elders; they are more likely to use new payments technology that closer aligns with the social implications often associated with the country—primarily the culture of risk aversion and its relationship to conservative spending habits. Firms in the payment space have the opportunity to leverage the youth demographic to innovate effectively—providing consumers products they don’t yet know that they need.
How do I know this? I cannot get to Japan—unfortunately American Airlines frequent flier miles are easiest to redeem on Latin American routes and my plan to study abroad in Asia was quickly foiled by my mother. So what is a young professional such as me to do instead? Research, read and write.
From a course I took at school titled “Intro to Japan” and some of my favorite movies, “Lost in Translation” as well as “Jiro Dreams of Sushi”, to friends and acquaintances with Japanese ancestry, I have used varied sources to form my opinions and beliefs of this fascinating society.
With a quickly aging population (nearly a quarter of inhabitants are over the age of 65) there continues to be a need in Japan for traditional payment products in the marketplace—cash still accounts for 60 percent of consumption in recent years. Fortunately, the Japanese are not technology averse (shocking—I know), in fact quite the opposite; with the third largest number of Internet users worldwide and mobile phone penetration of 88 percent compared to 86 percent in the US, there is potential for widespread adoption of novel payment solutions.
Recent innovation can ensure there are products to meet this potential; take m-Commerce for example, or even a debit display card that offers real-time access to your checking account balance. As the youth become more confident in the digital payment space, there is an opportunity to convert excessive cash spend to digital.
Topics: Payments Strategy